Per capita revenues at 15-year low

There are two main arguments against seeking new revenue to help close the current budget gap. The first—that an economic downturn is exactly the wrong time to raise taxes—comes down to an argument over economic philosophy, and it is certainly reasonable to debate the anti-stimulus impact of tax hikes versus the anti-stimulus impact of reduced government spending… the cost in human suffering aside.

But the second argument—that our current budget crisis is largely due to out-of-control spending, and thus should be solved by slashing the same—well, that ultimately comes down to facts… facts that upon close evaluation, simply don’t support the thesis. In fact, as I’m about to show you, far from ballooning, Washington state government tax revenues have actually shrunk over the past 15 years, when adjusted for population growth and inflation.

The heart of the out-of-control spending argument comes from the simple fact that the state’s “near general fund” spending jumped from $25.6 billion during the 2003-2005 biennium to about $32.6 billion for the 2007-2009 biennium that ends in June… an undisputed 27.2 percent increase over four years. (Or so says the conservative Washington Policy Center.)

That’s a big jump, and it doesn’t take a spreadsheet jockey to intuit that it far outpaces population growth or inflation or even overall growth in the state economy over same period. During last year’s gubernatorial campaign, Dino Rossi repeatedly argued that such spending growth was unsustainable, and he was right. That’s why nobody was arguing to sustain such growth rates.

In fact, the jump was an anomaly made possible by a spurt of real estate bubble fueled revenues, and largely exaggerated by the fact that the starting point, the 2003-2005 budget, embodied a substantial dip in both revenue and spending growth as the state struggled to recover from the previous recession. Spending did jump 27.2% during the first Gregoire administration, but only relative to the low point that immediately preceded it. This four-year snapshot may have been useful to Republicans for rhetorical purposes, but it doesn’t take into account population growth or inflation, and it hardly says anything about long term budget and revenue trends.

So, if the anti-taxers are going to argue that the current budget crisis is the result of out-of-control spending rather than a revenue shortfall, let’s take a look at long term tax revenue trends, and see what the data tells us. And since the TABOR crowd absolutely insists that population plus inflation is the proper metric for limiting growth in government, let’s start by tracking state tax revenues over time, and adjusting as such.

As you can clearly see, even using the less applicable CPI-U index, per capita state taxes in Washington have remained relatively flat over the past fifteen years, ranging from a low of $1,978.42 in 2001 to a high of $2,265.47 in 2007, and currently hovering damn near its fifteen-year average.

But as I’ve previously explained, the CPI is the wrong measure for tracking the growth in cost of government, as the highly-educated, labor-intensive services governments tend to provide (doctors, nurses, teachers, etc.) do not benefit from the same sort of productivity gains that technological advances have bestowed on economic sectors such as manufacturing. That’s why the IPD is widely accepted as the most accurate measure of inflation, even by the conservative Heritage Foundation, which insists that “the IPD measures inflation more accurately than the CPI.”

The US Bureau of Economic Analysis also breaks down the IPD into various economic sectors, and it is per capita state taxes adjusted by the IPD for State and Local Government Consumption that is tracked by the blue line… data which clearly shows even the 2005-2007 jump in revenues as nothing more than a spike in a trough, and our 2008 revenues having come in at a fifteen year low.

The trend is clear even adopting the anti-tax frame: adjusted for population growth and the most accurate measure of inflation for the types of products and services governments consume, state tax revenues have consistently trended down over the past fifteen years. And that’s before the dramatic drop in revenues resulting from the current economic crisis.

Quite simply, Washington state suffers from a long term structural budget deficit, that while masked by the good times and exacerbated by the bad, continues to drive down per capita revenues in real dollars over time. Even the conservative Tax Foundation, Tim Eyman’s think tank of choice, shows WA’s state and local taxes plummeting from 10.4% to 8.9% of personal income over the past 15 years, ranking us dead even with Mississippi.

So where is the evidence of a state government out of control? Apart from a four-year snapshot taken entirely out of economic, demographic and historical context, there is none. Zero. Zip. Nada.

Our economy will eventually recover, but unless we address our long term revenue deficit, our state government will emerge smaller than it was before the crisis, and its ability to provide services and invest in infrastructure will continue to shrink over the decades hence.

Well, what do you know, Washington citizens have given themselves a big tax cut recently. Of course, I knew that — the reason state revenues are down is because Washingtonians are paying less sales taxes because they’re buying less taxable stuff. We may surmise that some of those purchases are being made out of state, motivated by the rising sales tax rate, and more people are hoarding more money. Regardless of the cause, state government has less money because citizens are paying less in taxes than 2 years ago.

@2 Well, talk about loaded questions! While I’m not authorized to speak for Goldy, I’ll offer my opinion from my own observations.

“From your posts I get the sense you are a strong proponent of raising taxes generally, and that you are particularly keen on maximizing government employment levels.”

Wrong on both counts. Goldy has argued for maintaining existing government services and gradually expanding them in line with growth of societal affluence. And he has made a good case for this: Our state still has many unmet needs, e.g., classrooms that are too large, starting teacher pay that is too low, kids without health care, out-of-date infrastructure that needs replacing or updating, etc.

“Could you disclose whether or not you’ve been (or are being) paid by entities that make money off amounts collected from taxpayers?”

So far as I know, he has only two sources of income, occasional radio gigs and whatever donations and advertising revenues his blog brings in.

1) Do away with 3 strikes and you’re out – that’s a Publican feel good plan that has no impact on crime but does cost tons of money

2) Stop enforcing victimless crimes. These so-called “morality” crimes like prostitution, etc., are again, right wing feel-good laws that sound good when they’re stumping for votes in the churches, but mean nothing – especially since most of the Publicans spend money on gay hookers anyway

3) Speaking of churches, they’re really just businesses – and businesses in the business of supporting right wing nutjobs so let’s stop giving these institutions tax breaks. Fuck em – let them pay their fair share.

These three things would OVER FUCKING NIGHT balance our budget.

Oh – but the Publicans don’t want to cut THEIR sacred programs do they?

“But as I’ve previously explained, the CPI is the wrong measure for tracking the growth in cost of government, as the highly-educated, labor-intensive services governments tend to provide (doctors, nurses, teachers, etc.) do not benefit from the same sort of productivity gains that technological advances have bestowed on economic sectors such as manufacturing. ”

And as I previously tried to point out, the three job categories you’re pointing to are not good examples.

There are less teachers per capita now due to how a smaller percentage of school age children in the population and the increased numbers of kids in private schools.

There aren’t that many doctors and nurses who are state employees.

Where the state has gained productivity from technology is in some of the same areas where the private sector has realized comparable gains: eliminatin of “support staff” needs.

In addition, doctors, teachers, and nurses aren’t representative of state employees overall. What they in no way represent is the very large cohort of state employees who only perform services for the state: the lawyers, accountants, auditors, purchasing agents, HR staff, tax collectors, IT pros, managers, clerks, receptionists, building and grounds maintenance teams, etc. Those positions have benefitted on productivity metrics from technology, just as have their counterparts in the private sector.

Now, I’ll not hesitate to add that the cost of providing services – both to the state and to the segment of the population served directly (such as some patient served by a nurse in a state hospital) – has risen faster than inflation. And I agree with you that the distinction of having the most fucking regressive tax system of any state in the country is a lousy one.

I have never held a government job, and never had or worked on a government contract. I have never been on any sort of government assistance, never taken advantage of food stamps (though God knows, I’ve qualified), and apart from a couple weeks in the late 1980’s, never collected unemployment benefits. I did sell site licenses for my rhyming dictionary software into a good number of school districts nationwide, but that was years ago.

And nobody pays me to blog. My only revenue from HA are the ads you see, and my annual fundraiser (which is coming up.) It’s not a good living at the moment.

No need to raise taxes. Kathleen Sibelius, another tax non-payer with the Obama administration, shows why y’all like tax increases—you guys don’t pay taxes. Heck, Daschle felt no need to pay $140,000 for a long time! Instead of a tax increase, I strongly suggest you nominate every democrat for B.O.’s administration and just watch the $$$ flow out as they each get busted for back taxes!

and btw, anyone here who feels they don’t pay enough taxes can start paying more. Right now. Don’t wait for the legislature or the dems in DC. Put your money where your mouth is; just start paying more now. You can, you know.

I believe substantial cost savings could be obtained by immediately culling the deadwood from the ranks of state employees who provide services to the state (as opposed to “front line” service providers who provide services to the public).

It is my further belief that there has not been systematic culling over the years of the least productive of the rank and file of those non-front-line FTE’s, and that unions representing them have effectively prevented any solid analysis of how much could be saved by such selective culling.

In short, slashing services provided by the current front line cohort may not be a result of selective culling of the balance, and substantial savings could be achieved by that means.

It would require the unions to play ball, and they may not be willing to go there. At minimum it is an idea I believe should be explored immediately.

Every couple of years the state revenues decline and people who work for the state are aware of it as budgets tighten.

The spittle-ridden right are always certain that the state is rife with waste and that every public employee is living high off the hog. Most public employees make low to middle salaries. I consider a higher salary to be above $45,000. The top level people and football coaches are limited in number and yet the ones that send the wingers into a blinding rage and come to symbolize the whole class of public employees.

When I was a financial aid counselor, I saw a lot of parents who made well over $100,000 a year eager to get their share of the public aid pie for their kid. And they were pissed that there weren’t Pell Grants and State Need Grants for them. I also saw a lot of parents in this income range who simply refused to pay anything for their kid’s college costs, hoping to take advantage of some sort of loophole in dependency status, making the kid eligible for aid because the parents had (cough) disowned them.

I bet some of you guys do this too with your kids. Enraged that there isn’t need-based financial aid for your little frat rat, and yet have no trouble calling government greedy.

I like the idea that at least one not-leftish person here is capable of a rational discussion. THANKS!

That said, I suggest there is a simple way to test your hypothesis.

Many of the part sof government have private counterparts. These include universities, colleges, prisons and hopsitals.

In each of these cases studies have shown that the actual cost of services is far lower in the state run institutions than in the private sector. I suspect the same is true for the State Police.

Similarly, I suggets .. again for a start, that you sum up all direct payments, not admin costs, to children, mothers, etc.

Note how all this comes together

colleges prisons hospital welfare … al of these involve direct support to parts of our society.

So, take these budget items and add them up. For the moment, treat them as if they were necessary. If indeed there is no way that cutting costs in any of these sectors, then how much money is left in the “discretionary budget” where you believe there is a lot of fat?

I assume there other items NOT in the mandated budget (debt, federal, consitution) that we would bothe agree can nto be cut .. the Guv’s salary, heat and light for state buildings, slary for legislators … that probably are also unavoidable. BUT, even without correcting for these, I will buy you a beer at DL, a beer of your choice, if there is enough TOTAL money left in the sate budget to “pay” off this deficit.

Now suppose that I am right. Then we are back at Goldy’s argument. Cuts in hospitals, colleges and prisons have long term costs. In effect we are hurting folks today AND imposing increased costs on our children. Does that make sense?

I do not have the time to do the exercise, but if you do let me know how it comes out. If I am correct, then you do not need to pay me the beer . as you will have done the work.

Actually, I considered including the National Guard but, I suspect the part of the guard fionaced by the State is pretty small.

To make nob’s job harder, I COULD have added in the part of the employee base whose job it is to “save” money. The revenue folks, the auditor, etc.

I can tell yu that at the UW, the single most blatant source of inefficiency is “compliance.” Between liberal do gooders (HIPPA, the Death With Dignity folks) and their conservative cousins (performance auditing, state personnel controls, etc) we spend millions of dollars ONLY to be in compliance without delivering any services.

Of course, the conservatives would go nuts if the next time I buy a computer it is not competitively bid, even though I can always buy these things cheaper than the State can. Imagine .. I buy a $2k computer. To ensure that the State’s money is pent well, someone needs to spend an hour or so checking different sources. Lets say that hour costs $100 since often it means they come back to me anbd I need to spend my (more expensive time) explaining why I want the Hard Drives Northwest machine with good parts even though that costs $2.50 more than the machine they want from Dell. The result is that someone, YOU and I, pay an overhead of s much as 5 to 10% in order to be sure we do not “waste” state money. Personnel is worse, MUCH worse.

Despite all that, our cost of doing business, for similar tasks, is about 30-50% LESS than the costs of the same tasks done by private sector research firms. How can this be? One answer is tha a LOT of UW employees work here for far less than “civilian wages” because they value the atmosphere of service and the intellectual challenges. I know from friends in the military, the VA, and yes, the cops, that this phenomenon of government efficiency is rather common.

#8 It certainly appears that if democrats would quit cheating on their taxes there would be a balanced budget. Did any of Obamas’ picks pay all their taxes? UNREAL. I think it will be funny if the State lowers the sales tax thinking more money will come their greedy way by imposing an income tax on the so called rich. Businesses of all kinds are barely squeeking by so future 1040 revenues are quite bleak. You couldn’t write a better movie than watching this bunch of tards. I fucking love it! State pension fund is all gone too! HAHAHAHAHAHHAHAHAHAHHAHAHAH

#16: If politicians can blow the state pension fund, steal all the social security money (what? you mean my money isn’t sitting in a trust fund in DC with my name on it? you mean they spend it on other things?), why would anyone entrust their health care to these bozos? They’ve proved they’re the last place you want to trust with your health and money.

Lauramae is the epitome of the hateful libtard class warfare queen. You make similar arguments to the dumb bunny Pelletizer.

My son attends UW. He is shocked the president makes >$1 Million. But he did ask is he worth it? Maybe we should limit the UW president salary since we pay for it in taxes. Just like the TARP plan and the proposals by TurboTax Tim Geithner. You work for us we can set your salary.

Lauramae is the epitome of the hateful libtard class warfare queen. You make similar arguments to the dumb bunny Pelletizer. My son attends UW. He is shocked the president makes >$1 Million. But he did ask is he worth it? Maybe we should limit the UW president salary since we pay for it in taxes. Just like the TARP plan and the proposals by TurboTax Tim Geithner. You work for us we can set your salary.

How does that sound Lauramae?

Uh, well you do set my salary. The Senate and the House just slashed over $500 million from higher education. It does affect my salary. Everytime the revenue goes down, our salary stays the same. This year, it will go lower.

I make $45,000. So yes, I think that the president of UW shouldn’t make $900,000 a year. Nor should the football coach make over a million a year for coaching boys playing a stupid game.

As for a hateful class warfair queen, I’m more like the mean neighbor lady. I have little patience with snot-nosed shits.

#22: Emmert may not be worth $900,000 a year, but I heard that the football program traditionally generates revenue for the school. That being the case, you can argue that this is a good area to spend on. The football program could well be subsidizing other areas of the university.

So Puddy has one question Lauramae: Why the class warfare? Leave that for Pelletizer. He’s a bitter old dumb bunny. You are better than that. You should be complaining to Gregoire who overspent and now has screwed those who “are” her voters.

This is what Cynical has been saying and now you are living it. You are in pain due to some decisions the queen implemented two years ago in the last biennium. Also you and your libtard friends ate up her swill of no deficit for the 2008 election cycle. Puddy’ll feel more pain as with two in college Puddy will be paying higher tuition next year. You should be asking your union rep what are they doing about their lockstep support of the Dummocraptics. You see when the Republican party is out of power, there is only one side to look at. Puddy remembers the clueless wonder moronic attacks of “your ideas lost”. Yep, now our hands are clean. Well, it’s your sides mess now they have to show us “the adults” in power. When MTR-X would call this FUWA, the HA weasel class would ridicule him. Now that there is a $9 Billion deficit, it’s BLUWA.

This is an oft repeated fiction. In a recent study only one school, I believe it was in Fla, did better than break even.

How can this be? Well, huge sums go to support the pro teams, not just football. The players cost far, fart more to support than any other students. Moreover, athletic depts. do not pay overhead .. that is they operate as if rent and all the other services were free. By comparison, the UW charges about 60% overhead for any research done on campus.

As for Emmert, this is a hard issue. I not only agree he is paid too much, but is pay level invalidates his credibility in may of the same ways that GM’s all stars can never be credible with the working force. Worse, Emmert is a career administrator and politician, he is without academic credentials (other than a doctorate). This also makes him le4ss credibl than we might wish.

There is, however, another side. he is a very good manager and widely regarded for good judgment. His skill in the private sector, at least the private sector up till last Fall, would easily merit a salary at this level.

@10 People like you always have facile solutions, don’t you? And your “solutions” always assume that (a) state workers are lazy, and (b) unions protect unproductive workers. But let’s suppose these presuppositions don’t pan out and it turns out there aren’t any state employees who need “culling” (as you put it) — then what? You don’t have a backup plan, do you? That would blow your whole ideology to hell, wouldn’t it?

@17 Why would I trust my health care to government? Because they couldn’t possibly be more dishonest, thieving, or abusive to the customers than private insurance companies, that’s why. Things wouldn’t get worse and might get better.

Medicare’s overhead costs are about 1/2 of 1%. This means the government-run program is 50 times as efficient as the private sector.

If we redirected the 24 1/2% that private insurers waste, or simply take as profit, we could cover all of the uninsured and still have enough money left to give everyone a sizeable cut in premiums, deductibles, and/or copays.

And before you dump on the uninsured, let me point out that most uninsureds are employed. The elderly are covered by Medicare; the welfare crowd gets Medicaid. But there’s nothing for the working poor — the folks who go to a job, work their butts off, but don’t have health insurance because their employers are too cheap to provide it and too cheap to pay workers enough wages to buy it themselves. In short, the uninsured, by and large, are the cheap labor conservatives’ victims.

Of course, if you don’t like the idea of government-guaranteed health care, you probably could talk me into financing health care for the working poor with a special tax on employers who pay below a certain hourly wage. These employers are, after all, forcing taxpayers to subsidize their labor costs so they can pocket more profit. Every time a low-paid worker qualifies for food stamps, taxpayers are putting money in his employer’s wallet.

Let’s say I start a business. I want to make widgets. I do a cost analysis of producing widgets and conclude that capital requirements are $1 per widget, materials will cost $1.50 per widget, and marketing and overhead will cost $1.50 per widget. Therefore, my total costs, exclusive of labor, will be $4 per widget.

Now let’s say each worker can produce 10,000 widgets per year, but a worker’s minimum subsistence is $15,000. If I pay only subsistence wages, the labor cost for each widget is $1.50.

I don’t expect someone to give me the plant and equipment for free. Nor do I expect suppliers to provide materials that cost them $1.50 for $1. Yet, the cheap labor conservative expects workers to work for less than what it costs them to provide their labor. Why is that? Why are all the rules of economics suspended when it comes to labor? Why does a cheap labor conservative, who wouldn’t dream of expecting investors to invest without return, or suppliers to provide materials at less than cost, expect workers to provide their labor at less than cost? What is it about cheap labor conservatives that makes them feel entitled to cheap labor?

I think it’s an inherited instinct that was passed down through their gene pool. I think they’re the descendants of history’s slave owners.

Much of human history consists of people trying out various cheap labor schemes: Feudal serfdom, slavery, indentured servitude, Stalinism, Nazi labor camps, etc. Today, we consider those who exploited the labor of others by means of force and violence to be “evil.” Cheap labor conservatives are the heirs to this dark tradition and they are evil, too.

Roger Rabbit Commentary: Employer benefits arose from the wage controls of World War II. Faced with labor shortages, and unable to compete for workers by offering higher wages, companies used health care and other benefits to sweeten the pot. After the wartime wage controls ended, benefits remained popular because of preferential tax treatment. But it’s not written in stone that benefits must be part of an employee’s compensation package.

Let’s say an employer decides to take away a health insurance plan worth $700 a month. Unless he raises wages by an equal amount, that’s a hefty pay cut. If I worked for that employer, and he didn’t make up the difference in cash, I’d look for another job.

Labor markets are, after all, competitive. No employer pays his employees out of the goodness of his heart. He pays what he has to, and no more, to get the help he needs. Any employer who reduces compensation runs the risk of losing his workers to other employers competing for labor.

So, let them cut benefits. And let the workers walk out. That’s what I’d do! Except I can’t, because I don’t work. Not working protects me from wage and benefit cuts! Nobody should work. Then it won’t be a problem.

Speaking of Publican tax cheats, I wonder if it’s too late to go after Swift Boat financier Sam Wyly, who happens to be a top-tier Republican contributor and well-known tax cheat. $300 million? Why no Publican outrage over goodl old Sam? Well of course we know the answer – it’s because Publicans only want rules that apply to the Democrats!

Robert Beale; founder of Minnesota Christian Coalition, delegate to national Republican convention; reported in Minneapolis Star-Tribune in August 2006; World Nut Daily defends: http://www.wnd.com/news/articl.....E_ID=32878 (did not file federal or state tax returns for four years, even though he received at least $5,696,574 in income between Jan. 1, 2000, and about September 2004.)

stillbentover, welcome to the HA Moonbat! libtard final four. You are the final contestant. Do you family proud. Continue to be the best ASShole there is.

Both of my sons know you are a racist ASShole pig. The younger asked why does Puddy deal with your silliness. Since Puddy knows most of my sons friends and they gravitate over to my house becuz they think I’m kool, Puddy will send #35 to all them so they can see the best of Goldy’s HA weasel chimps in action.

They wondered why you ran from meeting me with GBS at lunch and again at dinner at The Ale House. They have a term, punk ASS beeeeeeeeeeeeeeeeeeeeyotch. Just like the term used on rulax. They wondered why you are stillbentover. Puddy told them about your need to be plugged daily. In fact Puddy will IM them and they can decide to answer your stupid comment themselves.

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